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Company will refund customers and change practices as part of the agreement

BOSTON - Today, Attorney General Martha Coakley's Office reached an agreement with Cataldo Ambulance Service Inc., resolving allegations the company unlawfully balance billed customers who used Cataldo ambulances in the aftermath of auto accidents. Under the Massachusetts Consumer Protection Act, medical service providers are barred from billing customers for amounts in excess of motor vehicle insurer payments for Personal Injury Protection (PIP) benefits in a variety of circumstances. The Attorney General's Office filed an Assurance of Discontinuance in Suffolk Superior Court today under which Cataldo agreed to reimburse consumers for any balance billing payments they have made from January 1, 2006 to the present, correct any reports previously made to credit reporting agencies relating to the balance billing demands, and remove any liens placed on consumer property without consumer consent.

The Assurance filed today alleges Cataldo charged consumers for the portions of the company's ambulance bills that the auto insurers had already rejected as unreasonable. This "balance billing" practice fails to remove the individual patient from disputes that should occur between the insurer and the service provider, as is intended by Massachusetts law.

"We are pleased that Cataldo Ambulance Inc. has resolved this issue with our office," said Attorney General Coakley. "Medical service providers should not balance bill customers already covered by the automobile insurance PIP coverage. This is unfair to customers, and can have an unwarranted and harmful impact on the consumers' credit scores."

Under the terms of the settlement, Cataldo may not balance bill customers covered by PIP in violation of Massachusetts law, report unpaid balance billing amounts to credit reporting agencies, or place liens on consumer property related to balance bill amounts that are not received as part of a judgment. Cataldo must also make a payment to the Commonwealth of between $50,000 to $100,000, based on the level of restitution that it is determined to be owed to customers.

This case is being handled by Assistant Attorneys General Peter Leight and Glenn Kaplan of Martha Coakley's Insurance and Financial Services Division.